Understanding Consumer

Behavior

How is CB Different from different

from other disciplines Like?

Organizational Behavior:

How individuals act within organizations?

Psychology:

Study of mind and social behavior

Sociology:

Study of society (Groups)

Anthropology:

How are social relations among humans organized?

How is CB Different from different

from other disciplines? When situation clues lead people to perceive

themselves as customers, they interpret world differently

Experiment: Half class as students Half class as Customers Perception of being CUSTOMER-Activates

knowledge domain with behavior changing in accordance to knowledge

Ownership: Controlling ones world, People use their possessions to impress others

Consumer Behavior

Behavior consumers display in searching, purchasing, using, evaluating and disposing off goods and services that they expect to satisfy their needs

CB focuses on how consumers or families take decision to spend available resources (time, money, efforts) on consumption related items

Consumer Behavior focuses on-

Consumers make buying decisions all the time. The Marketing Task is to understand

What do they buy Product & Services Why do they buy Motivation to

purchase When do they buy Timing of purchase Where do they buy Channel decisions How do they buy Decision process How often do they buy Purchase cycle How do they evaluate it after purchase How do they dispose it of

CB

Two Different Consuming Entities

Personal Organizations

(Own, Households) Profit Org

Non Profit Org.

Govt Agencies

Institutions

Evaluation of CB with Marketing

Concept

3 Business Orientations-

Product Orientation (1850-1920)

Gear up mfg skill to enhance production

Demand exceeded supply

Sales Orientation (1930-1960)

Sell more than what mfg dept can produce

Supply greater than demand

Evaluation of CB with Marketing

Concept Marketing Orientation (1960s.)

Even in 1930s some companies realized that Understanding of CB for future growth

Eg 1 (KFC)-Colonel Sanders (Road Side Restaurant, recipes based on T & P. Popularity grew, Opened up a motel, bad reputation (nice people avoided it). Decides to overcome bad image, puts a sample clean, comfortable, hygienic room.

Eg 2 (McDonalds-1950)-Brothers have to select locations-Fly over towns and look for Churches Where there were Churches, there were good American Families

CHANGES IN CONSUMER

BEHAVIOR

1. Increasing shift towards

CONSUMERISM

Strong and Sustainable economy (8%)

1/5th of worlds citizens below 20 are

Joining ranks of Indian consumer

Youthful population waiting to explore

2. Getting more and more

materialistic

Work hard and get rich

More purchasing power

Findings of survey (Gallop)-Average work week- Indian (50 hrs), American (42 hrs), European (Less than 40 hrs)

Means- 1.5 hours extra every day, want to get rewarded.

Admit we want money, but ready to work to get that money-PURCHASING POWER

3. Consumerism becoming way of

life Set aside money and show desire to buy

durables (Indicators of things to come)

Looking for life pleasures Here and now PLEASURE

Difference between older gen and younger generation.

Travel and Entertainment Industry Multiplexes, Theme Parks, Resorts Mobile-Growth 1600%, 3 mill subsribers in a

month

Lots of new customers entering market-BPO

4.Comfort of Indians in borrowing

Older generations-No one was comfortable unless it was for survival

Desire for good life..

EMIs..(65 % of salaries)

5. Liking for foreign products

decreasing

Earlier-They dumped obsolete technology, passed on products well pass date.

Now-MII Label has credibility

Survey

1996-34% expressed faith in Indian cos

2006-60% expressed faith in Indian cos

6.Changing role of women

I can and I will

Parallel role in running household

Influencing factors in purchase decision if not deciding factors

Survey

83% surveyed approved working outside their homes

74% approved their delaying marriage for education and career

Trends of eating out-Convenience items

7.Comfort with technology

Mushrooming of call centers (BPO/ KPO)

E-Chaupal ITC

Consumer getting better deals

Cyber Grand Maas

CONSUMERISM AND CONSUMER

BEHAVIOR IN CONTEMPORARY

ENVIRONMENT

Consumerism

It is a social and economic order that is based on the systematic creation and fostering of a desire to

purchase goods or services in ever greater amounts.

The term is often associated with criticisms of consumption starting with Thorstein Veblen or, more

recently by a movement called Enoughism.

Veblen's subject of examination, the newly emergent middle class arising at the turn of the twentieth century,

comes to full fruition by the end of the twentieth century

through the process of globalization.

Consumerism

The term "consumerism" is also used to refer to the consumerist movement or consumer activism, which seeks to protect and inform consumers by requiring such practices as honest packaging and advertising, product guarantees, and improved safety standards.

In this sense it is a movement or a set of policies aimed at regulating the products, services, methods, and standards of manufacturers, sellers, and advertisers in the interests of the buyer.

Consumerism A Social Phenomenon

Beginning in the 1990s, the most frequent reason given for attending college had

changed to making a lot of money,

outranking reasons such as becoming an

authority in a field or helping others in

difficulty.

This correlates with the rise of materialism.

Businesses have realized that wealthy consumers are the most attractive targets

of marketing.

The upper classs tastes, lifestyles, and

Consumerism A Social Phenomenon

Emulation is also a core component of 21st century consumerism. As a general

trend, regular consumers seek to emulate

those who are above them in the social

hierarchy.

Overall Model of Consumer

Behavior Culture

Subculture

Demographics

Social Status

Reference Groups

Family

Marketing

Activities

Perception

Learning

Memory

Motives

Personality

Emotions

Attitudes

Self-Concept

and

Lifestyle

Decision Process

(Situations)

Problem Recognition

Information

Search

Alternative

Evaluation

and Selection

Outlet Selection

and Purchase

Postpurchase

Processes

Exte

rnal

Influences

Inte

rna

l In

fluences

Consumer Needs and

Motivation

Needs and Motivation

Needs are the essence of the marketing concept.

Motivation is the driving force within individuals that impels them to action.

Consumer Motivation

Represents the drive to satisfy both psychological and physiological needs

through product purchase and

consumption.

gives insights into why people buy certain products.

stems from consumer needs: industries have been built around basic human

needs.

Types of Consumer Needs

Physiological needs-

Fundamental human needs, including

food, water and shelter

Safety and Health needs-

Threats to our safety and health motive

purchases for personal security and

protection.

Safety and Health needs

Protecting our personal information and

computers represents new types of safety

needs.

Businesses provide a variety of products

and services to appeal to safety and

health conscious consumers.

Types of Consumer needs

Need for love and companionship-

Humans are social creatures who need

to experience and express love and

companionship.

Need for love and companionship

Services and products help individuals

find and attract others

products are often used as symbols of

love and caring

need for pleasure

products, services and consumption

activities provide fun and excitement.

need to possess

Consumers often acquire products simply

because of their need to own such

products such as collectors.

need for variety

marketers may introduce different

versions of original brands.

variety may become focus of product

positioning.

Motivational conflicts and need

priorities

satisfying a need often comes at the expense of another need- this causes

motivational conflicts.

Types of motivational conflicts

Approach-approach: deciding between two or more desirable options.

Avoidance-avoidance: deciding between two or more desirable options.

Approach-avoidance: behavior has both positive and negative consequences.

Motivational conflicts and need

priorities

resolving motivational conflicts requires prioritizing needs.

Maslows hierarchy:

some needs take precedence over other

needs- physiological needs take top

priorities.

Differences in the importance attached to

various needs affects how consumers

evaluate products.

Motivational conflicts and need

priorities

Because of consumers' different motivational priorities, companies use

benefit segmentation: dividing consumers

into different market segments based on

the benefits they seek from purchase and

consumption.

Maslows Hierarchy of Needs

Model of the Motivation Process

Goals

The sought-after results of motivated behavior

Generic goals are general categories of goals that consumers see as a way to

fulfill their needs

Product-specific goals are specifically branded products or services that

consumers select as their goals

Goals Structure for Weight Control

The Selection of Goals

The goals selected by an individual depend on their:

Personal experiences

Physical capacity

Prevailing cultural norms and values

Goals accessibility in the physical and social environment

Motivations and Goals

Positive Motivation

A driving force toward some object

or condition

Approach Goal

A positive goal toward which

behavior is directed

Negative Motivation

A driving force away

from some object or

condition

Avoidance Goal

A negative goal from which behavior is

directed away

Rational versus Emotional Motives

Rationality implies that consumers select goals based on totally objective criteria

such as size, weight, price, or miles per

gallon

Emotional motives imply the selection of goals according to personal or subjective

criteria

The Dynamic Nature of Motivation

Needs are never fully satisfied

New needs emerge as old needs are satisfied

People who achieve their goals set new and higher goals for themselves

Substitute Goals

Are used when a consumer cannot attain a specific goal he/she anticipates will

satisfy a need

The substitute goal will dispel tension

Substitute goals may actually replace the primary goal over time

Frustration

Failure to achieve a goal may result in frustration.

Some adapt; others adopt defense mechanisms to protect their ego.

Arousal of Motives

Physiological arousal

Emotional arousal

Cognitive arousal

Environmental arousal

Philosophies Concerned with

Arousal of Motives

Behaviorist School

Behavior is response to stimulus

Elements of conscious thoughts are to be ignored

Consumer does not act, but reacts

Cognitive School

Behavior is directed at goal achievement

Needs and past experiences are reasoned, categorized, and transformed into attitudes and

beliefs

Murrays List of Psychogenic Needs

Needs Associated with Inanimate Objects:

Acquisition, Conservancy, Order, Retention, Construction

Needs Reflecting Ambition, Power,

Accomplishment, and Prestige:

Superiority, Achievement, Recognition, Exhibition, Infavoidance

Needs Connected with Human Power:

Dominance, Deferrence, Similance, Autonomy, Contrariance

Cont. Murrays List of Psychogenic Needs

Sado-Masochistic Needs : Aggression, Abasement

Needs Concerned with Affection between People: Affiliation, Rejection, Nurturance, Succorance, Play

Needs Concerned with Social Intercourse: Cognizance, Exposition

A Trio of Needs

Power individuals desire to control environment

Affiliation need for friendship, acceptance, and

belonging

Achievement need for personal accomplishment

closely related to egoistic and self-actualization needs

Consumer Perception

Consumer Experience,

Learning and Knowledge

Perception

The process by which an individual selects, organizes, and interprets stimuli

into a meaningful and coherent picture of

the world

How we see the world around us

Elements of Perception

Sensation

Absolute threshold

Differential threshold

Subliminal perception

Sensation

The immediate and direct response of the sensory organs to stimuli

A stimulus is any unit of input to any of the senses.

The absolute threshold is the lowest level at which an individual can experience a

sensation.

Differential Threshold

Minimal difference that can be detected between two similar stimuli

Also known as the just noticeable difference

Subliminal Perception

Stimuli that are too weak or too brief to be consciously seen or heard may be strong

enough to be perceived by one or more

receptor cells.

Is Subliminal Persuasion

Effective? Extensive research has shown no

evidence that subliminal advertising can

cause behavior changes

Some evidence that subliminal stimuli may influence affective reactions

Aspects of Perception

Selection

Organization

Interpretation

Perceptual Selection

Consumers subconsciously are selective as to what they perceive.

Stimuli selected depends on two major factors Consumers previous experience

Consumers motives

Selection depends on the Nature of the stimulus

Expectations

Motives

Perceptual Selection

Selective Exposure

Selective Attention

Perceptual Defense

Perceptual Blocking

Consumers seek out messages which: Are pleasant They can sympathize Reassure them of

good purchases

Concepts

Perceptual Selection

Selective Exposure

Selective Attention

Perceptual Defense

Perceptual Blocking

Heightened awareness when

stimuli meet their

needs

Consumers prefer different messages

and medium

Concepts

Perceptual Selection

Selective Exposure

Selective Attention

Perceptual Defense

Perceptual Blocking

Screening out of stimuli which are

threatening

Concepts

Perceptual Selection

Selective Exposure

Selective Attention

Perceptual Defense

Perceptual Blocking

Consumers avoid being bombarded by: Tuning out TiVo

Concepts

Organization

Figure and ground

Grouping

Closure

People tend to organize perceptions into figure-

and-ground

relationships.

The ground is usually hazy.

Marketers usually design so the figure is the

noticed stimuli.

Principles

Organization

Figure and ground

Grouping

Closure

People group stimuli to form a unified

impression or

concept.

Grouping helps memory and recall.

Principles

Organization

Figure and ground

Grouping

Closure

People have a need for closure and organize

perceptions to form a

complete picture.

Will often fill in missing pieces

Incomplete messages remembered more than

complete

Principles

Interpretation

Physical Appearances

Stereotypes

First Impressions

Jumping to Conclusions

Halo Effect

Positive attributes of people they know to

those who resemble

them

Important for model selection

Attractive models are more persuasive for

some products

Perceptual Distortion

Doves campaign stresses the

everyday woman.

Interpretation

Physical Appearances

Stereotypes

First Impressions

Jumping to Conclusions

Halo Effect

People hold meanings related to stimuli

Stereotypes influence how stimuli are

perceived

Perceptual Distortion

Interpretation

Physical Appearances

Stereotypes

First Impressions

Jumping to Conclusions

Halo Effect

First impressions are lasting

The perceiver is trying to determine which

stimuli are relevant,

important, or

predictive

Perceptual Distortion

Interpretation

Physical Appearances

Stereotypes

First Impressions

Jumping to Conclusions

Halo Effect

People tend not to listen to all the

information before

making conclusion

Important to put persuasive arguments

first in advertising

Perceptual Distortion

Interpretation

Physical Appearances

Stereotypes

First Impressions

Jumping to Conclusions

Halo Effect

Consumers perceive and evaluate multiple

objects based on just

one dimension

Used in licensing of names

Important with spokesperson choice

Perceptual Distortion

Positioning

Establishing a specific image for a brand in the consumers mind

Product is positioned in relation to competing brands

Conveys the concept, or meaning, of the product in terms of how it fulfills a consumer need

Result of successful positioning is a distinctive, positive brand image

Positioning Techniques

Umbrella Positioning

Positioning against Competition

Positioning Based on a Specific Benefit

Finding an Unowned Position

Filling Several Positions

Repositioning

Perceived Quality

Perceived Quality of Products

Intrinsic vs. Extrinsic Cues

Perceived Quality of Services

Price/Quality Relationship

Perceived Risk

The degree of uncertainty perceived by the consumer as to the consequences (outcome) of

a specific purchase decision

Types

Functional Risk

Physical Risk

Financial Risk

Psychological Risk

Time Risk

How Consumers Handle Risk

Seek Information

Stay Brand Loyal

Select by Brand Image

Rely on Store Image

Buy the Most Expensive Model

Seek Reassurance

Personality and Consumer

Behavior

What Is Personality

The inner psychological characteristics that both determine and reflect how a

person responds to his or her environment

The Nature of Personality

Personality reflects individual differences

Personality is consistent and enduring

Personality can change

Theories of Personality

Freudian theory Unconscious needs or drives are at the heart

of human motivation

Neo-Freudian personality theory Social relationships are fundamental to the

formation and development of personality

Trait theory Quantitative approach to personality as a set

of psychological traits

Freudian Theory

Id

Warehouse of primitive or instinctual needs for which individual seeks immediate satisfaction

Superego

Individuals internal expression of societys moral and ethical codes of conduct

Ego

Individuals conscious control that balances the demands of the id and superego

A Representation of the Interrelationships

Among

the Id, Ego, and Superego

Freudian Theory and

Product Personality

Consumer researchers using Freuds personality theory see consumer

purchases as a reflection and extension of

the consumers own personality

Neo-Freudian Personality Theory

We seek goals to overcome feelings of inferiority We continually attempt to establish relationships

with others to reduce tensions

Karen Horney was interested in child-parent relationships and desires to conquer feelings of anxiety. Proposed three personality groups Compliant move toward others, they desire to be

loved, wanted, and appreciated

Aggressive move against others Detached move away from others

Trait Theory

Personality theory with a focus on psychological characteristics

Trait - any distinguishing, relatively enduring way in which one individual differs from another

Personality is linked to how consumers make their choices or to consumption of a broad product category - not a specific brand

Trait Theory

Innovativeness

Dogmatism

Social character

Need for uniqueness

Optimum stimulation level

Variety-novelty seeking

The degree to which consumers are

receptive to new

products, new

services, or new

practices

Consumer Innovators

And Noninnovators

Trait Theory

Innovativeness

Dogmatism

Social character

Need for uniqueness

Optimum stimulation level

Variety-novelty seeking

A personality trait that reflects the degree of

rigidity a person

displays toward the

unfamiliar and toward

information that is

contrary to his or her

own established beliefs

Consumer Innovators

And Noninnovators

Trait Theory

Innovativeness

Dogmatism

Social character

Need for uniqueness

Optimum stimulation level

Variety-novelty seeking

Ranges on a continuum for inner-directedness to other-

directedness

Inner-directedness

rely on own values when evaluating products

Innovators

Other-directedness

look to others

less likely to be innovators

Consumer Innovators

And Noninnovators

Trait Theory

Innovativeness

Dogmatism

Social character

Need for uniqueness

Optimum stimulation level

Variety-novelty seeking

Consumers who avoid appearing to

conform to

expectations or

standards of others

Consumer Innovators

And Noninnovators

Trait Theory

Innovativeness

Dogmatism

Social character

Need for uniqueness

Optimum stimulation level

Variety-novelty seeking

A personality trait that measures the level or

amount of novelty or

complexity that individuals

seek in their personal

experiences

High OSL consumers tend to accept risky and novel

products more readily than

low OSL consumers.

Consumer Innovators

And Noninnovators

Cognitive Personality Factors

Need for cognition (NC) A persons craving for enjoyment of thinking

Individual with high NC more likely to respond to ads rich in product information

Visualizers versus verbalizers A persons preference for information

presented visually or verbally

Verbalizers prefer written information over graphics and images.

From Consumer Materialism to

Compulsive Consumption Consumer materialism

The extent to which a person is considered materialistic

Fixated consumption behavior

Consumers fixated on certain products or categories of products

Compulsive consumption behavior

Addicted or out-of-control consumers

Consumer Ethnocentrism

Ethnocentric consumers feel it is wrong to purchase foreign-made products

They can be targeted by stressing nationalistic themes

Brand Personality

Personality-like traits associated with brands

Examples

Fa and freshness

Nike and athlete

BMW is performance driven

Levis 501 jeans are dependable and rugged

Brand personality which is strong and favorable will strengthen a brand but not necessarily

demand a price premium

A Brand Personality Framework

Product Personality Issues

Gender Often used for brand personalities

Some product perceived as masculine (coffee and toothpaste) while others as feminine (bath soap and shampoo)

Geography Actual locations like Philadelphia cream cheese and Arizona

iced tea

Fictitious names also used such as Hidden Valley and Bear Creek

Color Color combinations in packaging and products denotes

personality

Self and Self-Image

Consumers have a variety of enduring images of themselves

These images are associated with personality in that individuals consumption

relates to self-image

Different Self-Images

Actual Self-

Image Ideal Self-Image

Ideal Social

Self-Image Social Self-Image

Expected

Self-Image

CONSUMER LEARNING

Learning

The process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior

Marketers must teach consumers: where to buy

how to use

how to maintain

how to dispose of products

Learning Theories

Behavioral Theories

Based on observable behaviors (responses)

that occur as the result

of exposure to stimuli

Cognitive Theories

Learning based on mental information

processing

Often in response to problem solving

Elements of

Learning Theories

Motivation

Cues

Response

Reinforcement

Models of Classical Conditioning

Strategic Applications of Classical

Conditioning

Repetition

Stimulus generalization

Stimulus discrimination

Increases the association between

the conditioned and

unconditioned

stimulus

Slows the pace of forgetting

Advertising wearout is a problem

Basic Concepts

Strategic Applications of Classical

Conditioning

Repetition

Stimulus generalization

Stimulus discrimination

Having the same response to slightly

different stimuli

Helps me-too products to succeed

Useful in product extensions

Basic Concepts

Strategic Applications of Classical

Conditioning

Repetition

Stimulus generalization

Stimulus discrimination

Selection of a specific stimulus from similar

stimuli

This discrimination is the basis of

positioning which

looks for unique ways

to fill needs

Basic Concepts

Instrumental

(Operant)

Conditioning

A behavioral theory of

learning based on a

trial-and-error process,

with habits forced as

the result of positive

experiences

(reinforcement)

resulting from certain

responses or

behaviors.

Types of Reinforcement

Positive

Negative

Forgetting

Extinction

A Model of Instrumental Conditioning

Instrumental Conditioning and

Marketing

Customer Satisfaction (Reinforcement)

Reinforcement Schedules

Shaping

Massed versus Distributed Learning

Cognitive

Learning

Theory

Holds that the kind

of learning most

characteristic of

human beings is

problem solving,

which enables

individuals to gain

some control over

their environment.

Information Processing

Relates to cognitive ability and the complexity of the information

Individuals differ in imagery their ability to form mental images which influences

recall

Information Processing and Memory Stores

Information Processing

Movement from short-term to long-term storage depends on

Rehearsal

Encoding

Retention

Information is stored in long-term memory Episodically: by the order

in which it is acquired

Semantically: according to significant concepts

Total package of associations is called a schema

Models of Cognitive Learning

Attention Cognitive

Action Conative Purchase

Postpurchase

Evaluation

Trial

Adoption

Decision

Confirmation

Affective

Evaluation

Interest

Evaluation

Persuasion

Knowledge

Awareness Awareness

Knowledge

Interest

Desire

Sequential

Stages

of

Processing

Innovation

Adoption

Model

Decision-

Making

Model

Tricompetent

Model

Innovation

Decision

Process

Promotional

Model

Consumer Relevance

Involvement depends on degree of personal relevance.

High involvement is:

Very important to the consumer

Provokes extensive problem solving

Measures of Consumer Learning

Recognition and Recall Measures Aided and Unaided Recall

Cognitive Responses to Advertising

Attitudinal and Behavioral Measures of Brand Loyalty

Brand Loyalty

Function of three groups of influences Consumer drivers

Brand drivers

Social drivers

Four types of loyalty No loyalty

Covetous loyalty

Inertia loyalty

Premium loyalty

Brand Equity

Refers to the value inherent in a well-known brand name

Value stems from consumers perception of brand superiority

Brand equity reflects learned brand loyalty

Brand loyalty and brand equity lead to increased market share and greater profits

CONSUMER ATTITUDE

FORMATION AND CHANGE

Attitude

A learned

predisposition to

behave in a

consistently

favorable or

unfavorable manner

with respect to a

given object.

What Are Attitudes?

The attitude object

Attitudes are a learned predisposition

Attitudes have consistency

Attitudes occur within a situation

Structural Models of Attitudes

Tricomponent Attitude Model

Multiattribute Attitude Model

Cognition

A Simple Representation of the Tricomponent

Attitude Model

The Tricomponent Model

Cognitive

Affective

Conative

The knowledge and

perceptions that are

acquired by a

combination of direct

experience with the

attitude object and

related information

from various sources

Components

The Tricomponent Model

Cognitive

Affective

Conative

A consumers emotions or feelings

about a particular

product or brand

Components

Starbucks Coffee

The Tricomponent Model

Cognitive

Affective

Conative

The likelihood or

tendency that an

individual will

undertake a specific

action or behave in a

particular way with

regard to the attitude

object

Components

Multiattribute

Attitude

Models

Attitude models that

examine the

composition of

consumer attitudes

in terms of selected

product attributes or

beliefs.

Multiattribute Attitude Models

The attitude-toward-object model

The attitude-toward-behavior model

Theory-of-reasoned-action

model

Attitude is function of evaluation of product-

specific beliefs and

evaluations

Useful to measure attitudes toward

brands

Types

Multiattribute Attitude Models

The attitude-toward-object model

The attitude-toward-behavior model

Theory-of-reasoned-action

model

Is the attitude toward behaving or acting

with respect to an

object, rather than the

attitude toward the

object itself

Corresponds closely to actual behavior

Types

Multiattribute Attitude Models

The attitude-toward-object model

The attitude-toward-behavior model

Theory-of-reasoned-action

model

Includes cognitive, affective, and

conative components

Includes subjective norms in addition to

attitude

Types

Strategies of Attitude Change

1. Changing the Basic Motivational

Function

2. Associating the Product with an Admired

Group or Event

3. Resolving Two Conflicting Attitudes

4. Altering Components of the Multiattribute

Model

5. Changing Beliefs about Competitors Brands

Consumer Decision Making

Levels of Consumer Decision

Making

Extensive Problem Solving A lot of information needed

Must establish a set of criteria for evaluation

Limited Problem Solving Criteria for evaluation established

Fine tuning with additional information

Routinized Response Behavior Usually review what they already know

Models of Consumers: Four Views of

Consumer Decision Making

An Economic View

A Passive View

A Cognitive View

An Emotional View

Goal Setting and Pursuit

A Simple

Model of

Consumer

Decision

Making

The Process of Consumer Decision

Making

Need Recognition

Prepurchase Search

Evaluation of Alternatives

Need Recognition

Usually occurs when consumer has a problem

Need recognition styles

Actual state

Desired state

Prepurchase Search

Begins with internal search and then moves to external search

The impact of the Internet

Search may be personal or impersonal

Issues in Alternative Evaluation

Evoked set Criteria used for evaluating brands Consumer decision rules and their

application

Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Series of decisions Decision rules and marketing strategy

The Evoked Set

Issues in Alternative Evaluation

Evoked Set Criteria used for evaluating brands Consumer decision rules and their

application

Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Series of decisions Decision rules and marketing strategy

Consumer Decision Rules

Compensatory

Noncompensatory

Conjunctive Decision Rule

Disjunctive Decision Rule

Lexicographic Rule

Compensatory

Decision Rules

A type of decision

rule in which a

consumer evaluates

each brand in terms

of each relevant

attribute and then

selects the brand

with the highest

weighted score.

Non-

compensatory

Decision

Rules

A type of consumer

decision rule by which

positive evaluation of

a brand attribute does

not compensate for a

negative evaluation of

the same brand on

some other attribute.

Conjunctive

Decision

Rule

A noncompensatory

decision rule in which

consumers establish a

minimally acceptable

cutoff point for each

attribute evaluated.

Brands that fall below

the cutoff point on any

one attribute are

eliminated from further

consideration.

Disjunctive

Rule

A noncompensatory

decision rule in which

consumers establish a

minimally acceptable

cutoff point for each

relevant product

attribute.

Lexicographic

Rule

A noncompensatory

decision rule -

consumers first rank

product attributes in

terms of importance,

then compare brands

in terms of the

attribute considered

most important.

Affect

Referral

Decision

Rule

A simplified decision

rule by which consumers

make a product choice

on the basis of their

previously established

overall ratings of the

brands considered, rather

than on specific

attributes.

The Decision Process for Functionally

Illiterate Consumers

A Purchase Can Involve a Number of

Decisions.

When purchasing car, the buyer is

involved in a number of decisions the

make, model, country of origin, the

dealer, the financing, and different

options.

Output of Consumer Decision

Making

Purchase behavior

Postpurchase evaluation

Postpurchase Evaluation

Actual Performance Matches Expectations

Neutral Feeling

Actual Performance Exceeds Expectations

Positive Disconfirmation of Expectations

Performance Is Below Expectations

Negative Disconfirmation of Expectations

Gifting Behavior

Gifting is an act of symbolic

communication, with explicit and implicit

meanings ranging from congratulations

and love, to regret, obligation, and

dominance.

Reported Circumstances and Motivations for Self-Gift Behavior

CIRCUMSTANCES

Personal accomplishment

Feeling down

Holiday

Feeling stressed

Have some extra money

Need

Had not bought for self in a while

Attainment of a desired goal

Others

MOTIVATIONS

To reward oneself

To be nice to oneself

To cheer up oneself

To fulfill a need

To celebrate

To relieve stress

To maintain a good feeling

To provide an incentive toward a goal

Others

Gifting Relationships

GIFTING

RELATIONSHIP

Intergroup

Intercategory

EXAMPLE DEFINITION

A Christmas gift from one

family to another family

A group giving a gift to

another group

A group of friends chips in

to buy a new mother a baby

gift

An individual giving a gift to a

group or a group giving a gift

to an individual

Intragroup

Interpersonal

A family buys a VCR for

itself as a Christmas gift

A group giving a gift to itself

or its members

Valentines Day chocolates

presented from a boyfriend

to a girlfriend

An individual giving a gift to

another individual

Intrapersonal A woman buys herself

jewelry to cheer herself up

Self-gift

A Simple Model of Consumption

Relationship

Marketing

Marketing aimed at

creating strong,

lasting relationships

with a core group of

customers by making

them feel good about

the company and by

giving them some

kind of personal

connection with the

business.

Reference Group and Opinion

Leadership

Reference Groups

Reference group: an actual or imaginary individual/group conceived of having significant

relevance upon an individuals evaluations, aspirations, or behavior

Influences consumers in three ways:

Informational

Utilitarian

Value-expressive

When Reference Groups Are

Important

Social power: capacity to alter the actions of others

Referent power Information power

Legitimate power Expert power

Reward power Coercive power

Types of Reference Groups

Any external influence that provides social clues can be a reference group

Cultural figure

Parents

Large, formal organization

Small and informal groups

Exert a more powerful influence on individual consumers

A part of our day-to-day lives: normative influence

Brand Communities and Consumer

Tribes

A group of consumers who share a set of social relationships based upon usage or interest in a

product

Consumer tribes share emotions, moral beliefs, styles of life, and affiliated product

Brandfests celebrated by community

Membership versus

Aspirational Reference Groups

Membership reference groups

People the consumer actually knows

Advertisers use ordinary people

Aspirational reference groups

People the consumer doesnt know but admire

Advertisers use celebrity spokespeople

Factors Predicting

Reference Group Membership

Propinquity

Mere exposure

Group cohesiveness

Positive versus

Negative Reference Groups

Avoidance groups: motivation to distance oneself from other people/groups

Antibrand communities: coalesce around a celebrity, store, or brandbut in this case theyre united by their disdain for it

Consumers Do It in Groups

Deindividuation: individual identities become submerged within a group

Social loafing: people dont devote as much to a task when their contribution is part of a larger

group

Risky shift: group members show a greater willingness to consider riskier alternatives

following group discussion than if members

made their own decisions

Factors Influencing Conformity

Cultural pressures

Fear of deviance

Commitment

Group characteristics

unanimity

size

expertise

Susceptibility to interpersonal influence

Opinion Leadership

Opinion leaders influence others attitudes and behaviors

Experts

Unbiased evaluation

Socially active

Similar to the consumer

Among the first to buy

Opinion Leaders

Is there a generalized opinion leader whose recommendations we seek for all types of

purchases?

Experts may be monomorphic or polymorphic

Old and New Social Networks

The Market Maven

Market maven: actively involved in transmitting

marketplace information of all types

Just into shopping and aware of whats happening in the marketplace

Overall knowledge of how and where to get products

The Surrogate Consumer

Surrogate consumer: a marketing intermediary hired to provide input into purchase decisions

Interior decorators, stockbrokers, professional shoppers, college consultants

Consumer relinquishes control over decision-making functions

Marketers should not overlook influence of surrogates!

How Do We Find Opinion

Leaders? The self-designating method

Simply ask individuals whether they consider themselves to be opinion leaders

Easy to apply to large group of potential opinion leaders

Inflation or unawareness of own importance/influence

Key informant method

Key informants identify opinion leaders

Sociometric Methods

Sociometric methods: trace communication patterns among group members

Systematic map of group interactions

Most precise method of identifying product-information sources, but is very difficult/expensive to implement

Network analysis

Referral behavior/network, tie strength

Bridging function, strength of weak ties

Word-of-Mouth Communication

WOM is product information transmitted by

individuals to individuals

More reliable form of marketing

Social pressure to conform

Influences two-thirds of all sales

We rely upon WOM in later stages of product adoption

Powerful when we are unfamiliar with product category

Negative WOM and Power of

Rumors

We weigh negative WOM more heavily than we do positive comments!

Negative WOM is easy to spread, especially online

Determined detractors

Information/rumor distortion

There are 3 themes to complaint Web sites

Injustice

Identity

Agency

Cutting-Edge WOM Influences

Social Networking

Crowd Power

Guerilla Marketing

Viral Marketing

Cultural Influence on

Consumer Behavior

Culture

The sum total of learned

beliefs, values, and

customs that serve to

regulate the consumer

behavior of members of

a particular society.

A Theoretical Model of Cultures Influence on Behavior

The Invisible Hand of Culture

Each individual perceives the world through

his own cultural lens

Lifestyle Matrix for Global Youth

188

Culture Satisfies Needs

Food and Clothing

Needs vs. Luxury

Culture Is Learned

Enculturation and acculturation

Language and symbols

Ritual

Sharing of culture

Enculturation The learning of ones

own culture

Acculturation The learning of a new

or foreign culture

Issues

190

Culture Is Learned

Enculturation and acculturation

Language and symbols

Ritual

Sharing of culture

Issues Without a common language, shared

meaning could not exist

Marketers must choose appropriate symbols in

advertising

Marketers can use known symbols for associations

Culture Is Learned

Enculturation and acculturation

Language and symbols

Ritual

Sharing of culture

Issues A ritual is a type of

symbolic activity

consisting of a series of

steps

Rituals extend over the human life cycle

Marketers realize that rituals often involve

products (artifacts)

Selected Rituals and Associated

Artifacts

SELECTED RITUALS TYPICAL ARTIFACTS

Wedding

Bridal make-up (dresses are mostly red for

brides in large parts of India); Grooms

wear sherwani.

Birth of child Savings Bond, silver baby spoon

Birthday Card, present, cake with candles

50th Wedding anniversary

Catered party, card and gift, display of

photos of the couples life together

Graduation Pen, card, wristwatch

Valentines Day Candy, card, flowers

New Years Eve Champagne, party, fancy dress

Culture Is Learned

Enculturation and acculturation

Language and symbols

Ritual

Sharing of Culture

Issues

To be a cultural characteristic, a belief, value, or practice must be shared by a significant portion of the society

Culture is transferred through family, schools, houses of worship, and media

194

Culture is Dynamic

Evolves because it fills needs

Certain factors change culture

Technology

Population shifts

Resource shortages

Wars

Changing values

Customs from other countries

The Measurement of Culture

Content Analysis

Consumer Fieldwork

Value Measurement Instruments

Content

Analysis

A method for

systematically analyzing

the content of verbal

and/or pictorial

communication. The

method is frequently

used to determine

prevailing social values

of a society.

Consumer Fieldwork

Field Observation

Natural setting

Subject unaware

Focus on observation of behavior

Participant Observation

Value Measurement Survey

Instruments

Rokeach Value Survey (RVS)

A self-administered inventory consisting of eighteen terminal values (i.e., personal goals) and eighteen instrumental values (i.e., ways of reaching personal goals)

List of Values (LOV)

A value measurement instrument that asks consumers to identify their two most important values from a nine-value list that is based on the terminal values of the Rokeach Value Survey

Values and Lifestyles (VALS)

A value measurement based on two categories: self-definition and resources

Scale to Measure Attitude

Toward Helping Others

Attitude toward helping others (AHO)

People should be willing to help others who are less fortunate

Helping troubled people with their problems is very important to me

People should be more charitable toward others in society

People in need should receive support from others

Toward a Shopping Culture

Is shopping what we do to create value in our lives?

The younger generation is shopping more

This has an effect on credit card debt